Arkansas v. Farm Credit Servs. of Centr. Ark.

From Conservapedia

In Arkansas v. Farm Credit Servs. of Centr. Ark., 520 U.S. 821, 825, 826, 117 S. Ct. 1776, 138 L. Ed. 2d 34 (1997), the U.S. Supreme Court held that the Tax Injunction Act (TIA), 28 U.S.C. § 1341, is to be read as a "'broad jurisdictional barrier'" and is "first and foremost a vehicle 'to limit dramatically federal district court jurisdiction.'" (quoting Moe v. Confederated Salish and Kootenai of Flathead Reservation, 425 U.S. 463, 470, 96 S. Ct. 1634, 48 L. Ed. 2d 96 (1976), and California v. Grace Brethren Church, 457 U.S. 393, 408-09, 102 S. Ct. 2498, 73 L. Ed. 2d 93 (1982)).

The Court held that jurisdiction had been withdrawn from federal courts over a claim by federally charted corporations to an exception from a state tax:

The Tax Injunction Act, 28 U.S.C. § 1341, restricts the power of federal district courts to prevent collection or enforcement of state taxes. It states: "The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." The statute, on its face, yields no exception to the jurisdictional bar save where the state remedy is wanting, but at least one other exception is established by our cases: The statute does not constrain the power of federal courts if the United States sues to protect itself or its instrumentalities from state taxation. Department of Employment v. United States, 385 U.S. 355, 358, 17 L. Ed. 2d 414, 87 S. Ct. 464 (1966). The present case explores the limits of this judicial exception. We decide here whether instrumentalities called Production Credit Associations, corporations chartered under federal law, are included within the exception when they sue by themselves. We hold they are not and so may not sue in federal court for an injunction against state taxation without the United States as co-plaintiff. The action must be dismissed, and, as a result, we do not reach the merits of the taxation dispute.

Justice Anthony Kennedy delivered the decision for a unanimous Court.

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